Vietnam's second chip assembly and test house took a step forward with new funding announced by Vietnam-Chipscale Advanced Packaging Services (V-CAPS) based in Hanoi.   The company's charter is to assemble and test chips for semiconductor companies.

Last year Intel, gave the Southeast Asian country a boost by announcing that it will build a big assembly plant there.  The $1 billion facility is on schedule to begin production in 2009 with 500 workers rising to a 1,000 by the end of the year.

The 300,000 square foot factory will be based at the new Hoa Lac High Tech Park and is targeted to employ 1,200 workers   Silicon Valley based investors are sinking about $200 million in the venture.  V-CAPS is expected to generate revenues in the range of $250 million once it becomes operational.

The packaging and test startup is the brainchild of founder Harry Rozakis who comes from Hong Kong chip assembly house, ASAT.  He became interested in Vietnam after taking a vacation there.

Sanford Garret

Another founder, Sanford Garret, is currently the president and CEO of the Garrett Group, a structured financial advisory firm.  He seed funded the project along with other investors.

Aside from the risk of investing in any emerging country, Vietnam with 84 million population is expected to grow its economy at about 9% per year.  Labor costs are about half of those in China which leads the world in outsourcing.  Companies such as VCAPS and Intel will find it tough in the beginning to find qualified engineers.  Students stayed away from engineering at the universities since there no jobs waitting for them in the past.  Collaboration between the new technology companies and universities will be key to build up the labor pool for the future.

Contact:
V-CAPS, www.v-capssemi.com